July 24th, 2020
Arnau Valdovinos
A total of CAD$850 million worth of cannabis has now been sold in licensed dispensaries in the first 5 months of 2020, which means that, according to current projections, total sales are set to surpass the CAD$2 billion in 2020.
Since cannabis was legalised in Canada in October 2018, the contribution of legal cannabis to the country’s GDP (which takes into account domestic retail sales, investments, inventories and the balance of trade) has increased four-fold and currently represents 0.26% of Canada’s GDP, valued at CAD$4.3 billion.
This has come at the expense of illegal trade, which has been included in GDP estimates since 2017 to account for the effects of legalisation. The illicit market has plummeted 25% in the first 20 months of legalisation, slashing the policing and healthcare costs of prohibition, while hundreds of millions of dollars are being collected in excise duties, sales taxes and license fees.
At a provincial level, Alberta led the sales of legal cannabis in May 2020, with a quarter of all sales being produced in the Western province, despite it representing less than 12% of the Canadian population. This is mainly due to the liberal approach to cannabis retail implemented in the province, which is home to 497 dispensaries, despite some signs of overbuilding that has led to cost restructuring.
On the other hand, the largest province Ontario, home to 38% of the Canadian population, only accounted for 22% of sales in the last month of the period, following the slow approval process of new retail outlets. Ontario only counts with a 100 open storefronts, despite hundreds of pending applications.
Meanwhile, Quebec, where its public monopoly only possesses some 40 cannabis storefronts, represented 21% of sales. British Columbia accounted for 15% of sales in May 2020 while Saskatchewan accounted for 6% with the 8 other provinces and territories combined representing 11% of retail sales.
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